The Hong Kong Mortgage Corporation Limited (HKMC) has priced its inaugural digital bond issuance, raising approximately HK$12 billion equivalent under its US$30 billion Medium Term Note Programme.
The multi-tranche transaction represents the largest digital bond issuance globally to date. It also makes HKMC the first public sector entity in Hong Kong to issue digital bonds.
The five-year Hong Kong dollar (HKD) tranche sets a new benchmark. It is the longest tenor ever for an HKD-denominated digital bond.
The issuance comprises HK$6 billion two-year, HK$2.5 billion five-year, and CNH3 billion three-year tranches.
Book-built and priced in Hong Kong, the offering attracted local, Southbound Bond Connect, and international institutional investors, generating a peak orderbook of around HK$24 billion equivalent from more than 100 accounts.
The Central Moneymarkets Unit (CMU) operates the distributed ledger technology platform, which also handles clearing and settlement for the bonds.
The digitally native structure improves operational efficiency, allows investors to access the bonds through existing CMU links to Euroclear and Clearstream, and shortens the settlement cycle from five business days to three.
“By launching tokenised fixed income products and driving market innovation, the HKMC demonstrates its unwavering support for the HKSAR Government’s strategic roadmap to cement Hong Kong’s position as a global fixed income and currency hub,”
said Howard Lee, Deputy Chief Executive of the Hong Kong Monetary Authority (HKMA) and Executive Director of HKMC.
“This milestone highlights the growing participation from arranging banks and first-time digital bond investors,”
said Colin Pou, Executive Director and Chief Executive Officer of HKMC.
“It reinforces Hong Kong’s distinctive role in bridging traditional finance with the digital asset era.”
Featured image credit: Edited by Fintech News Hong Kong, based on image by yrmahim11 via Magnific